The author is a Forbes contributor. The opinions expressed are those of the writer.

Loading ...

Loading ...

This story appears in the {{article.article.magazine.pretty_date}} issue of {{article.article.magazine.pubName}}. Subscribe

A Boeing 787 Dreamliner in flight (Photo credit: Wikipedia)

It's been two weeks since global aviation authorities grounded Boeing's 787 Dreamliner, and investigators still don't know what's wrong with the jet, much less how to fix it, or how long that process will take. But Boeing executives say they're not throttling back production or redesigning the electrical subsystems that seem to be the root of the problem.

"There are no instructions to slow down," CEO Jim McNerney told analysts and members of the press in a conference call on Wednesday. "It's business as usual. Let's keep building airplanes and then let's ramp up as we planned."

When Boeing announced its fourth quarter earnings on Wednesday, it beat analyst expectations thanks in part to a record backlog of orders, and strong demand from customers to add to their Dreamliner fleets. Despite the fact that the long-range mid-size jet is now grounded --and Boeing won't be allowed to deliver any more until that problem is addressed-- the company said its predicted 2013 revenues of $82-$85 billion assume "no significant financial impact from the FAA-mandated grounding of its 787 Dreamliner fleet."

In fact, Boeing contends that it will actually speed up 787 production: "The program remains on track to further increase the final assembly build rate to seven per month in mid 2013 and 10 per month by late 2013, with a subsequent increase in delivery rates," McNerney said.

The 787′s troubles began with an incident in Boston on January 7, when a battery on an empty jet caught fire; on January 16 an All Nippon Airlines Dreamliner was forced to make an emergency landing in Japan after on-board alarms indicated smoke in an electrical compartment and passengers reported a burning smell in the cabin. As a result, the FAA ordered all operators of U.S.-registered Boeing 787 to cease operations. International aviation authorities quickly followed suit.

It didn’t take long for investigators to discover the root of the problem: The high-tech Dreamliner uses lithium-ion batteries –the same kind you might find in your laptop or cell phone– and electric motors instead of traditional hydraulic controls. Battery-based systems are smaller and lighter, and were supposed to make the Dreamliner far more fuel efficient. But in the few cases under investigation, the batteries heated up and caught on fire.

McNerney said that Boeing knew of no incidents where the battery system had to be replaced due to unusual failure or safety concerns, and that the only replacements were for standard maintenance reasons, though the batteries have been replaced at a "slightly higher" than predicted rate. He also said the company has no plans to step away from lithium-ion technology, either in the 787 or in future vehicles. "Nothing we've learned has told us that we've made the wrong choice on the battery," he said. "We feel good about the battery technology and its fit for the airplane."

Boeing executives also dismissed the possibility of slowdowns in other business lines due to engineering talent and resources getting diverted to fixing the Dreamliner. "This is a highly compartmentalized issue," McNerney said. "We have deep expertise within Boeing... and because of the specialized nature of the technology and of the investigation, it’s not drawing from any critical resources of any other programs."

So far, investors seem to share McNerney's optimism for a quick resolution to the Dreamliner's problems: Shares of Boeing stock closed up 1.28% for the day, and are down just 1.02% overall since the beginning of the January.